further losses for gold. melissa: media agencies huge ad deal with twitter. we will tell you what you need to know before the i phone maker comes out. nicole: i say it what do you think with ben bernanke and the fed printing money. what do you make of it? the worst week of the year.

it is a gain of about 1%. travelers and dupont, raising prices. the stocks at an all high. i do not want to leave out united technology. back to you. lori: oil prices are fighting for games here. trying to follow gains in the equity market.

>> it is battling. it is getting a heck of a lot closer. there is absolute no dow about it. the rbob market is lower. part of that is refineries. that is actually putting downward pressure on gas. lori: battles falling. >> i think we are getting darn close. when they give you $200 almost overnight in a rally back to 100, i would take my profits to. technically, it really looks

like we could have a major rebound chart. melissa: gold has fallen more than 15% of far this year. we have the global head of research. patrick, thank you for being here today. you guys are betting that gold is going to 1200 by the end of the year. >> we are now at 1200. people bought old in the past. we are looking at risk. money creation, central bank, yes. there is no credit. negative interest rates. they will be moving into

positive. 1200 is our next target. melissa: you think them that we have seen lately is just technical. let's talk about the physical demand going on in asia. there are lines outside of jewelry shops in beijing right now. big article about this. >> this is only a small part. what i see is a huge amount of gold.

seven interesting. we see some very powerful forces on both sides right now. let me talk to you about the european economy both coming in, you know, more bearish than expectations. what can they do. positive for interest rates. on the other side, we still -- melissa: you think they will step in and do more easing in europe? >> they will cut interest rates.

little impact because interest rates are already low. what we need is measures. the ecb could loan some money. melissa: that is an interesting perspective. we are quite bullish on the u.s. economy. we are positive. thinking would be good.

this will account for some of the assets. melissa: thank you so much for coming on. lori: we have some updated news for the housing market today. rising 1.5%. that is just shy of the estimates. the pace has increased by 18.5% from year ago. bonuses are getting smaller. they are caving to regulators and scaling back bonuses. the trade journal said the fed started calling banks last year about compensation plans. jon corzine facing a lawsuit now over the collapse of mf global. he is being sued by louie freed.

the lawsuit alleges that corzine engaged in risky trading practices. melissa: a vote of confidence and a big check. amanda richman of necks on why the media firm has agreed to spend hundreds of millions of dollars on ad. lori: whether or not it is too late to get in on action. melissa: today, the winners are the bears. you can see it is down about six tenths of a percent. silver getting hit the hardest. we will be right back. ♪

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they don't know it yet, but they're gonna fall in lo, get married, have a couple of kid [ children laughing ] move to the country, and live a long, happy life together where they almost never fight about money. [ dog barks ] because right after they get married, they'll find some retirement people who are paid on salary, not commission. they'll get straightforward guidance and be able to focus on other things, like each other, which isn't rocket science. it's just common sense. from td ameritrade. melissa: twitter getting a vote of confidence. reaching a multi- year deal.

what about twitter has been shelling out the big bucks? amanda richman is joining us now. thank you for joining us. >> thank you. melissa: the buzz is hundreds of millions of dollars in a multi- year deal. also something called the tv lab that deals with research. >> it is about the innovation that it brings. the opportunity for us to bring our advertisers into an environment with twitter to really understand the social tv space. melissa: what does that mean in english for people that do not understand advertising? >> went to third audience are sitting next to their smart phone and tablet and watching tv. there are conversations

happening. their customers include coca-cola, procter and gamble, all of the big names that are out there. they will be able to go on twitter and mine what consumers are talking about. what shows they are watching. it seems like you can collect data. it is endless. >> absolutely. how do we mind these opportunities whether it is direct to understand the conversation. we can make sure that our brands are more fully embedded and engaging. melissa: i am an avid twitter user. it is easy, clean, straightforward. there is not a lot of clutter.

what is an add on twitter going to look like and will it ruin the experience? >> i think it will look very different tomorrow than it does today. you want to create advertising that is even more relevant. you wanted to be more engaging. melissa: it is not the difference between twitter and tv, it is a bridge. twitter is a bridge to talented. >> absolutely right. bringing it together and understanding that the conversations that are happening are largely happening on twitter. you even sell that on the super bowl this year. it is about making tv work better as well. melissa: a lot of the reason why

people are on twitter is because it agreed. it is very user-friendly. i can communicate with people who watch the show. it seems like there is not a real way to monitor eyes that. >> it is about learning to grow together. we are all part of this ecosystem that is really changing rapidly through consumer behavior. how do we better understand that melissa: thank you so much for coming on. we appreciate your time. lori: let's get you updated on the markets as we do every 15 minutes. we saw the dow really jumping around. any word as to why? nicole: there is a lot of word as to why. the market dropped over 140

points. it moved into negative territory. we are back to where we were. apparently, there were some issues and tweets that went out. they focus. it was a market moving event. we saw the market fell off dramatically and, right back to virtually where we were. we are about 12 points away from that level at this moment. there were some notes concerning president obama that were lost. they are now being followed up by some things that were more truthful. if you are out to lunch, you missed the whole thing. lori: we can confirm that the ap twitter account was attacked. it was to your point false. melissa: that is amazing.

we are talking about the power of twitter you see the market perhaps react and respond to that. it is back to where it was now. a major stock to watch today is netflix. shares soaring today. time to make some money with charles payne. did you see what just happened? charles: so unfortunate when these things happen. one of the most amazing stealth rallies in history. it is really sad, sad stuff. i netflix. [ laughter ] my daughter is at the house on sunday. she said she is getting rid of cable and doing netflix. this is an amazing quarter for the company. what was interesting, i would

have put up a table of the membership and the profit sources. everyone talks about streaming right now. you would be surprised. dvds really did well for them. their core business. melissa: isn't this amazing, remember dvds? charles: their profits were 113 million. that almost rivals what they make from domestic streaming. it is absolutely amazing. the real buzz here is can it keep it going and can it continue going with this original content? it is grace you have a house and cars -- melissa: spending $100 million for two seasons.

charles: orange is the new black. that is a prison drama. they have a whole bunch of stuff, now. they will have to be able to prove they can have the same success. i feel like i blew it. i always talk to people about a notably taking these kinds of things. i just kind of fell asleep at the wheel on not one. lori: i love how you are so humble. no, really. lori: thank you, sir. travel left waiting at the gate. long lines blamed on budget cuts. take a look at how the dollar is faring today. back up.

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melissa: we are learning more about the sudden drop on the dow. hiv reporting explosions in the white house was "bogus both. president obama is fine. the dow is back near session highs. right now it is up 129-point. lori: the chart shows it all. let's talk about another major aggravation. our next guest braving the airport. is the chairman of the house committee on transportation, we

heard you are quite frustrated. >> absolutely. but they have chose to do is to lament them in a way that has the maximum negative affect on the airlines. they turned us into politics, instead of what makes positive sense. the president's strategy is he wants the taxes increased. we are not willing to do that. these big cities, chicago, atlanta, those airports will feel the impact economically. people around the country will be weighing in. we looking at legislation to push this issue. there is 47,000 employees.

there are 15,000 controllers. also, when you look at what they are and, waterloo, iowa, it is treated the same way as chicago. this does not make sense. lori: you are exactly right. i meant to say looking for a tax increase. here is the dead -- devils advocate. it will actually lay off workers >> that for morale. this is bad for the safety.

the airline industry, whether it is cargo or passengers, contributes a trillion dollars to the economy. this is very bad. again, they have the authority to be flexible. if the economy continues to move, the safety is intact. lori: they may postpone these for those 30 days. do you think that is a viable solution? >> they have that flexibility.

they think they will get us back to the table to have an increased tax on the american people. that will not happen. lori: people do not even bother to make flight arrangements. melissa: that lay. it hurts the whole industry. lori: the government waiting on fisker. trying to recoup taxpayer dollars. melissa: first, here is a look at who is up and who is out on this wild day in the markets. we will be right back ♪ why are 8 million people sleeping better tonight?

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melissa: breaking news right now. let's get back to the floor of the new york stock exchange. nicole petallides with reaction to the drop on the dow this hour after a fake associated press tweet. nicole? >> it is pretty unbelievable when you watch how the markets move so dramaticall dramaticallyally. show the intraday chart. look what happened here intraday. we were up over 130 points over the highs of the day. the then rumors began. so what did we see. we saw a complete selloff and back to where we are. i will get away from peter tuck man and he make as lot of orders and he is very loud. what do we see? first rumors something happened to president obama. we saw the market move to the downside. then we heard about an explosion in the white house and president obama was hurt. only to find out later that the ap, associated press, their tweets were hacked. so now even jay carney came out in the white house

briefing says the president was fine. i was just with him. ap came out that their account was indeed hacked. we saw dramatic moves within the market. we saw the dow move into negative territory. it is pretty unbelievable. frankly a, the president is fine and b the markets are back to where they were. back to you. melissa: nicole, thanks. lori: bmo cap ha capital lowered its 2013 price target for apple twice in the last week. let chess check in with a senior research analyst at abm markets. to keep an eye what iphones consumers are buying. keith, welcome to you. the crux of your latest forecast, your latest price target downgrade if you will is really based on verizon earnings which showed weaker than expected only 50%. the iphone sales were of the iphone 5, high-end, best margins, if you will, very attractive margins so you say expect disappointment

today? >> we think so. we have as you mentioned two cuts. the first, actually had a chance to go out and visit with a number of carriers around the world, both face-to-face and over the phone and that led me to the conclusion that apple was candidly losing share and we think losing share to samsung and no longer the top-notch phone out in the market. we think effectively competing with samsung. we think the market is moving away from apple. they're losing some share in the high end. in addition, we think there's a number of chinese phones or low cost phones that are grabbing some of the middle market opportunities. so there is just more competitive dynamics in the market. the second thing is, we actually included, what we believe apple's next foray into the market will be. what we characterize more of a mid prizes phone of the we put that in our estimates in the december quarter which would include giving a phone or working with china mobile

and so, we went ahead and included that in our model. that resulted in lower revenues and margins associated with that phone. the third which is what you mentioned, verizon's mix was very disappointing. it does suggest that our thoughts are right, that the market is moving away from the very high-end into the mid-priced category. but yes, that is exactly why, we went ahead and lowered numbers again this week because a mix was very different, at least for the next couple quarters than we previously supposed. lori: apple's margins dropped below 40% late last year. this is the 7th time in eight quarters, apple's margins dropped below the key 40% level. that could be a tone seter, right? what the overall gross margin turns into. the other theme, at least what i'm interested in, is what apple will do with all of this famous cash on hand that people keep sort of snickering about, what wl they return it to shareholders, given a

precipitous decline in share price. that is exactly right. >> you hit on two very good points. number one there is lot of bad news baked into apple's stock price here. i don't think anybody is expecting a terribly good quarter. most people are expecting a pretty weak june guide. ultimately one of the key variables if not the key variable will be the gross margin. if we're right that a mid-priced phone will be introduced, that will put a little bit of pressure certainly over the next couple quarters as that comes out. the second thing is on the capital allocation, whether it is dividend or buyback, i think people are expecting apple to be more responsible to their shareholders and, we actually expect some news tonight, but, nevertheless, in the next say, month, i think apple will severely disappoint shareholders if it is not more generous with the cash it sits on its balance sheet and frankly isn't doing shareholders any good. lori: keith, when you look at dividend share buyback? >> i think it will actually come in both. lori: what percentage on the

dividend? >> so, if let's say for argument sake, just a dividend increase, apple's current dividend yield is about 2.5%. we think it needs to go up to 3.5, 4% from the current levels, just to satisfy investors. and if it, obviously they can distribute that to, between if it is not all dividend, will go between dividend and buyback. we think apple needs to be much more generous in order to support the stock here particularly as growth slows down. lori: i have to split. apple might be looking for a new ceo, what do you think about that? >> i would be surprised if that is the case because tim cook is probably one of the best supply chain execution people out in the world. could apple add to the current leadership? that is certainly a possibility but i would be very surprised if for whatever reason tim was bounced. i think he is terrific what he does. lori: we're all set up for apple report tonight. apple earnings after the bell. keith, thanks so much for your time. >> thank you. melissa: we're all over the breaking news. markets plummeting and

snapping back after a fake tweet from the associated press. we're back at the new york stock exchange for trader reaction on this wild swing. lori: the plain truth. government investigators grilling boeing about its prized dreamliner jet. i think that might be fading these days. melissa: first her is what the treasury markets are doing right now. you can see unchanged on the 10-year. we'll show you the 30 as well. we'll be right back. [ tires screech ]

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>> i'm cheryl casone with your fox business brief. wal-mart is planning to base executive compensation over the retailer successfully overhauls its compliance operation according to "wall street journal" wal-mart's audit committee can choose to reduce or eliminate 2014 cash incentives for top executives if the company doesn't meet certain objectives. senior managers will provide quarterly reports to the audit committee on carrying out the changes. legg mason is on the rise after 14% increase the quarterly dividend. they can expect a cash payout of 15 cents a share. fedex is making residential delivers a little easier. customers can deliver detailed instructions when and where they will want the packages delivered. that is the latest from the fox business network, giving you the power to prosper.

melissa: we want to get up to speed on the shocking drop in the dow. the associated press confirming its twitter account was hacked and a tweet reporting explosion in the white house was quote, bogus. white house spokesman jay carney in the press briefing saying president obama was fine. the dow he erased almost its gains and it happened in the flab of an eye. here is charles -- charlie gasparino, it happened so quick. >> two thinks going on here. when i tweet out the a story i don't have a gazillion followers and fairly significant following of wall street guys and political types. stocks react. i can tell you that with others as well. social media is huge. the other thing this

underscores i believe is the notion that the markets, structure of the markets are still, very fragile. one of the problems we have, we spend a lot of time talking about insider trading. i writing a book on it. so i don't want people to stop talking about it. hierarchy of issues small investors that face people watch our show, one of the things they worry about the structure of at market. quill the price change in 35 seconds? why is that? why do stocks implode all of sudden and rise back up? i will tell you why, i can't tell you why in the few minutes we have here. i can tell you that the sec and, one of the problems with mary shafire row with her -- shapiro, legacy at the sec that we have disenfranchised market. not just the new york stock exchange. there are all sorts of black pools people trade on and match buyers and sellers which what markets do. when you have that disintermediation in the market it leads to stuff

like this. who knows where the trade occurred. they probably don't know. it is kind of a scary thing and something the sec needs to put on its front burner. mary jo white is the new chairwoman. she doesn't strike me as a person who would do that. her background, she is brilliant. she is a brilliant law enforcement person but i always think the law enforcement person should be the head of the enforcement digs not a person at the top of the sec which sets a broader agenda which regulation is big thing that is unw problems she will face. let's hope she brings its up but i'm doubtful and this stuff will keep going on. lori: this happen so fast, in the blink of an eye and then recouped it. would this happen in the open outcry system? >> probably not they would say don't throw the baby out with the bath water. there is efficiencies when you hit a button to bypass a human being. i will tell you someone coming on here talking about jon corzine is not talking

about jon corzine now which is little strange. melissa: that is the main story. you came here to talk about that. >> i'm just saying, specialists did prevent the wild volatility and that was a good thing. here is what we know about corzine if few minutes we have, i will throw this out there, he is not yet, he has been sued by louie freed, the bankruptcy trustee. i believe negligence was the word that freed threw around. we point out, he has not been sued by regulators. this is an investigation that is being principally led by the commodities futures trading commission authority, commission. not really the sec. cftc has taken the lead here and they are still having a difficult time trying to show intent. this is a key thing. when people want corzine's scalp i tweet this out and people kill me, screaming at me, why isn't this guy in jail? look at this way, corzine's defense he put on a trade on italian spanish bonds. we point out that the trade turned out to be very profitable. people got worried about the

trade in the market and they pulled out their money from, they pulled out their lines of credit. every brokerage firm needs lines of credit to survive, from mf global. the ensuing madness where mf global, maybe didn't have enough staff on board, caused them, it caused money, customer money to be somehow comingled with the firm money. it is hard to prove, that a, that trade was done with malice. which it wasn't. it turned out to be right ultimately. b, that he really was directing people to misuse customer money. it is, when you break it down, i'm telling you, i'm no fan of jon corzine politically. he is a very nice man personally, this is a hard case to bring. now i'm not saying they are not going to bring it. for all i know they have charges tomorrow. i haven't seen them and i haven't heard of it, but i will tell you he will litigate this back and he could win. this is hard, when you start breaking down the elements of what occurred, it is hard to find intent to break the law.

melissa: charlie gasparino, thanks so much. >> okay. lori: thanks, charlie. we are following up on breaking news on the stock market. john corpina, joins us from the floor of the new york stock exchange. john, give us your take here. we had word of the ap tweeting something that turned out to be bogus an attack on the white house, right? that sparked a brief but deep selloff and bounceback. what is the word from floor? >> clearly we were watching all the news feeds and everyone is chattering and talking what is going on, when we see something like this your intuition comes into play and your experience comes into play. what we saw something here a news story going around but took us a little while to figure out this was true or not. unfortunately what happens the computers kick in. you get a snowball effect. all computers, bids start to cancel. sell al gore rifles hit big and you see the big swing in the market. as you were saying in the lead-in, what we do down here, market makers do down

here this volatility would not happen if we had not such important dependency on the computer trading systems that are there. lori: let me ask you personally, john, charlie gasparino raised a great point about the social media in the market, do you take that into consideration in doing your daily job? >> absolutely. everyone uses social media, twitter and other functions out there to obtain news and to watch news. but you have to understand it is not regulated. the credibility of the source has to come into play. people really have to take into consideration what the headlines are and effect they can have on the markets. yes, do we watch stories? listen to comments, read blogs, absolutely. have to take them with a grain of salt, especially even when it comes from the associated press, when a headline like that comes out you have to take a deep breath and wait and see if it is true or not. lori: also from your own experience how do you deal with advancement and growth and proliferation of computer-driven trades? does it make your job

tougher? >> something like this unfortunately benefits me. i have sell orders out there that immediately stop selling if the market goes down 10 points and comes right back up. my cell customers are saying, wow that is fantastic. thank you for using your experience to see that was not really what was going on and you didn't follow it down. my customers who are buying stock, clearly got prices at lower prices they were happy about. when humans come into play in a situation like this the human instinct, the human responsibility in our experience will always prevail. lori: appreciate you sharing your own experience on this kind of wacky trading afternoon, john. one quick comment if you will. did we lose him. how he expects the thing to wrap up. how will we close out with the close and earnings reports and such? >> back to business from usual as 40 minutes ago. the market will continue to trend higher. apple earnings after the bell people are holding onto that and getting a good report from there. lori: i think everyone is in the same camp. thank you, john. >> thank you. lori: we're all over the

breaking news. markets plummeting and snapping back about the fake tweet from the associated press about an attack which was bogus at the white house. partier barnes is next on that for us. melissa: a look at some of today's winners and losers. we'll be right back.

melissa: more on the breaking news. the ap twitter account was hacked. the markets with a whipsaw action with a fake tweet about president obama. peter barnes has the latest for us. look at that chart, wow, peter. >> the sec, securities & exchange commission has declined comment on this

incident but i can also tell you having reported on this stuff before, that it is standard operating procedure for the sec to look at any kind of major movement in the market like this caused by whatever problem, whether it is, you know, the flash crash or what have you. so i'm sure is. ec officials are on the case. so is the ap and so is the white house. at the white house briefing that just began a few minutes ago it started off with jay carney asking, giving the first question, which he usually does, to the associated press reporter. it was nedra pickler in the front row at the white house briefing room and here is the exchange. take a listen. >> just want to say at the top it appears as though ap's twitter account has been hacked. so anything that was just sent out about any incident at white house is absolutely false and we'll be -- shortly to clarify that if that hasn't happened already. >> i appreciate that. i can say that the president is fine. i was just with him.

>> of course, like i said, regulators will, are likely looking into this as we do with any kind of a major breach in the market like this, but this appears to be obviously a security issue over at the associated press and in just the most recent episode of hacking of a news organization. we've seen hacking of "the wall street journal"'s website and other news organizations. not sure who's doing it. some are pointing at the chinese. we'll see. i'm sure there will be a full investigation. back to you. melissa: i have no doubt, peter barnes. thanks so much. coming up tonight on "money," we have senator john hoeven of north dakota. he is going to join me to discuss the epa's response to the state department negative review of the keystone pipeline. will it prevent it from being approved. we have more on twitter and apple earnings kicking off at the top of the show. we'll bring you all updates about the call. join us 5:00 p.m. eastern on fox business. lori: if you blinked, you

missed it. we had a mini flash crash this hour. the dow has recouped the over 100 point decline, gaining 127 points right now. stocks are in rally mode. lpl chief market strategist jeffrey klein stop says last week was a turning point for the markets. hopefully he will address with tracy and ashley as they walk into the studio. don't miss it. @

ashley: good afternoon, everybody, i'm ashley webster. tracy: i'm tracy byrnes. big gains for stocks but the market is on edge. the dow is now up, up about 11 points. it has -- 131 points. it has since bounced back. in the last hour it lost pretty much all of that in minutes on a bogus ap report about explosion at the white house. we'll look what those jitters say about the state of the this market coming up. ashley: outrage over faa furloughs and flight deys. lawmakers demanding answers from the white house.

but those delays not stopping airline stocks from soaring. they're in the green today. we'll have all of that straight ahead. tracy: everyone is talking apple expected to report its first quarterly profit drop in 10 years. can apple do anything to stop the slide? we'll have a preview coming up. ashley: first at to the top of the hour, stocks back on track after a steep drop last hour. nicole petallides on the floor of the new york stock exchange. sandra smith is in the pits of the consider me. let's begin with nicole. i guess it as hacker flash crash of sorts, nicole. >> that is good way to call it. this is moment, whew, its all done. we made it through. look where market averages are. they are virtually where they were moments before we saw the market move into negative territory. the dow industrials up 130 points, a gain of 1%. like s&p 500, tech-heavy nasdaq best of the bunch. continuing trend we've seen three days in a row with up

arrows. talk about for the dow. let's talk about what we saw for the dow just after 1:00. that is when rumors began to circulate on the floor, all the rumors were false, that president obama had been hurt by explosions in the white house. the market sold off dramatically. market sold off into negative territory to have it recoup most of those losses. you saw some of the traders buying on the way down. the best of the bunch, actually probably made money on that. ultimately it was a hacker who got into the associated press and did that tweet and obviously all those things were false. i want also to take a look to get back to business and talk about names hitting multiyear high, all-time highs on dow jones industrials. five names hitting all-time highs, disney, home depot, proctor & gamble and johnson & johnson. ashley: very good, nicole. thank you very much. tracy: the treasury markets were reacting to that bogus tweet that president obama was injured. sandra smith in the pits of

the cme we details. what happened down there when that happened? >> lit up lies -- like a christmas tree. the floor was loud irthan i heard in years. treasury pits, s&p 500 futures pit, currency pit, everything lit up you could tell something was going on. a calm has set back over the markets here. got to tell you there was major reaction. i'm getting interesting reaction from traders on the floor asking them how is this different than a old school rumor 10 years ago that would move the markets, right? we saw a huge dip in the stock index futures. they have since repounded. the big difference this is coming out on more official site like twitter where it is much more real. not a rumor starting at a trade desk in new york where it takes 20 minutes to get around. this spreads fast and affects markets fast. i talked to john brady. he was basically saying this is whole new element of risk that these markets have to

take on and have to prepare for, social networking, facebook, twitter. this is real danger for these markets. not just for the presidential election. for somebody to hack into the accounts to make news but the markets have to be prepared for this sort of thing. we saw dramatic reaction across the board down here, guys. wasn't just the stocks index futures and currencies. we also saw it in the commodities markets, oil, gold all saw major reaction in the markets. it had a ripple effect and set in immediately. of course when we were able to find out it was a hack, things returned back it normal. so the one big difference from a rumor 10 years ago, guys, we were able to get confirmation almost seconds after this came out and markets were able to return to normal. we didn't have that necessarily 10 years ago. it would take a lot longer for that to correct. a lot of traders still rehashing this down here now. back to you. tracy: sandra smith, good and bad to all of it i guess. thank you. ashley: our first guest says

last week's market route could signal the end of what he calls investor complacency. jeff klinetop, market strategist at lpl finance . before we get into that, here is what can happen at markets. erroneous report from the associated press that got hacked. my oh, my, the reaction was dramatic, wasn't it? >> markets are becoming sensitive. for years it was easy for a fake press release to hit an individual stock. with twitter and social networks the ability to pr bomb a whole market is now available. the reaction was very interesting. we are seeing more of a reaction in the markets to some news flow that has come out. china's gdp last week, some earnings reports ibm, bank of america. some of the news flash today, you tend to see more of a defensive market, one a bit more jittery through much of the climb over the last three months, might suggest we're near a turning point here in terms of investor

complacency. ashley: that is interesting. this is liquidity driven bull market. that hasn't changed really. the fed is continuing to pump cheap money in. so why now are we getting perhaps a lack of, or less complacency as you point out than we have before? >> well, it is interesting, in the springs of each of the last three years we started it see one of these slides emerge, ranging from 10 to 19%. april was the peak. continued to fall through the summer. what happened in each of those last three years was that the fed brought out a new program, operation twist, qe2, qe3. they announced a new program. they're not announcing anything new this time. they're merely continuing what they're already doing. so that is less of a positive in the background for the market than what we've seen in the past. now markets are up today a little bit on the idea that the ecb may begin to do something. maybe there are less bullets in the gun we might have had in each of the last three years to offset some of those declines.

ashley: that's interesting. talk about earnings. 32% of s&p so far reported have beat earnings estimates. but on the revenue side only 42%. that is disappointing, certainny below average. what is your take on that and as we move forward, what are you expecting? >> yeah, it is a very weak picture. the bottom line companies are only beating their earnings estimates through austerity, not growth. ashley: yeah. >> they're cutting costs to get there. they're not growing a top line. you can only do that for so long. not like we're beginning of cost-cutting in corporate america. it has been running for quite some time. estimates for second half of this year. analysts looking for double-digit earnings growth. very unlikely to materialize. as numbers come down, estimates come down, hard to see price to earnings ratios for stocks go up. ashley: if we see the market start to drop, jeff. is that a buying opportunity so many are waiting for? there is lot of cash out there. if we see that dip, the correction, whatever you want to call it, is that a time to pile into the market, jump in feet first, maybe?

>> well, i think it is. you want to begin to dollar-cost-average into this market. we're unlikely to see a market that continues to trend higher, right? we've generally seen everyone one days or so we get a five to 10% you'll back. that is a good thing. it is a pause that refreshes the rally. we're not at end of this bull market. they usually end 17 or 18 times p-e multiples since world war ii. we have some room to go. this is an opportunity for investors who have been on the sidelines to begin to buy into this market and not buy high and see a pullback and get their fingers burned and not want to come back to stocks at all but buying in a pullback can be very attractive. ashley: very good. we're already out of time. jeff klein stop, lpl financial. appreciate it. >> thanks for having me. tracy: coming up we'll have much more on the fake tweet that crashed the market. would you call it hacker --. ashley: hacker, hack flash. tracy: we'll come up with something. how the associated press is taking action. we'll have that coming up.

apple shares back above $400 a share. how is the tech giant's results in two hours going to move the stock? liz macdonald will have a preview next. ashley: i don't remember what i said hack flash crash. whatever. raising our rage overflight delays tied to faa furloughs. some in congress demanding that the white house take action. we'll have latest on that story ahead. first as we head out to break, see how oil is trading on the day. the dow is up 131 points. oil just slightly lower. $89.16 a barrel. we'll be right back. everybody has different investment objectives, ideas, goals, appetite for risk. you can't say 'one size fits all'. it doesn't. that's crazy. we're all totally different. ishares core. etf building blocks for your personalized portfolio. find out why 9 out of 10 large professional investors choose ishares for their etfs. ishares by blackrock. call 1-800-ishares for a prospectus, which includes

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tracy: apple expected to make history in a couple of hours with its quarterly results. liz macdonald is here to preview it. emac's bottom line. good or bad? >> it will be interesting to see what happens after the bell and we're going to be tracking it closely with david and liz. let's go through the second quarter profit

forecast. here's what the street is looking for when it comes to apple's second quarter profit report is coming out. basically about $10 earnings per share versus a little more than 12 bucks a share a year ago. 9.5 billion in profit versus nearly 12 billion a year ago. here's the storyline. improved sales versus a year ago. what the storyline is here, apple's gross margins are getting squeezed and they're dropping versus a year ago. wall street is not liking that. we're looking for 36.5 million iphones sold. 15 million ipads. up dramatically versus a year ago. here is the debate breaking out on wall street, peak apple? has apple already peaked? will we see the $700 plus share price we saw last september when the iphone 5 was introduced? we did the number crunching. i should disclose i have apple in one of my portfolios. it is trading at the same level as dell. look at that, dell has way less in the way of market

cap. apple's market cap is 17 times the size of dell but pe is the same as dell. it is trading half the value of google with three times google's revenues. being valued the same as microsoft and samsung. those two have a fraction of apple sales as well. you know the thing is with apple, it is of course steadily guided its profit forecast down. it has been cutting it eight times in the last, made eight downward revisions since the second quarter forecast. it has lost nearly 290 billion bucks in market value sips the september 2012 peak. ashley: bottom line, even held to a higher standard, this is a company that is still when you look at it pretty darn good. >> it is the victim of its own success. ashley: right. >> the victim of very large numbers it has been posting. another thing they're watching, what will apple basically introduce? it has been seven months since the last new product. we used to measure that in years, right?

when iphone or ipad, when steve jobs introduced it in 2010, basically was trading at 200 dal a share. it is price performance is better than any large tech company without amazon in there. tracy: a lot of smart traders are coming out saying it is dead money. how come? >> because we had a blitz of upgrades last fall. it is dead money, because what are they going to do with the cash pile? can they find anything to do with it. ashley: yeah. >> they don't know what to do with 137 billion bucks. a final important point. no one is steve jobs. let's face it. no one is steve jobs. tracy: keep comparing it -- >> exactly. what we'll be looking for. will they introduce a cheap, cheap iphone later this year? goldman sachs, lazard capital says yes. they will have a new product, coming out whether it is a cheap iphone would ruin the brand premium possibly. ashley: china has been a problem. >> the problem it squeezes its growth margins more with a cheap iphone and ruin its brand premium. that is debate on wall street. i won't say it will ruin it but that is the debate.

ashley: samsung is a tough competitor. >> that's right. there is the storyline. watching it. tracy: it is cheaper. that is partially why. >> yes. tracy: emac, good one, coming up to quarter past the hour. time for nicole petallides at the new york stock exchange where stocks, well, they have quickly recovered, haven't they after that flash drop last hour. we're up 131 on the dow. >> rumors can hit the floor and hit them hard and fast luckily we were able to confirm them quickly. the dow jones industrial average right there, that intraday chart shortly after 1:00 p.m. there were rumors circulated on the floor, very loud, all the traders were buzzing. p.m. was hurt, president obama was hurt. then it began to pan out there was explosion and then it began to pan out that ap obviously admitted that their twitter account was hacked and all this was false and quickly we regained. we were up 130 points and dropped down to negative 13. look at the what happened to the volatility index. if you lay them over each other as the dow was dropping significantly, volatility index was creeping higher to a 15

level. it obviously is showing you that. we're keeping an eye on names coming out with numbers of at bell. back to you. ashley: nicole, thank you very much. complete coverage of today's earnings. that is busy day on "after the bell" 4:00 p.m. eastern. tracy: a lot of earnings reports today. all right, several u.s. banks scaling backbone us ins just because the federal reserve asked them to do so? huh? what do shareholders have to say about all that? financial fund manager anton schutz weighs in next. ashley: first let's look how the u.s. dollar is moving right now. let's take a look. as you can see, against the euro, well, the euro is undo, mostly all down against the dollar except for the mexican peso. will the ecb cut rates? coming up soon there is a lot of belief by a quarter of a percent but half a percent. ecb, mr. draghi i have to take action. and euro moving lower. we'll be right back. [ male announcer ] this is joe woods' first day of work.

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>> now 20 minutes past the hour i'm heather nauert with your fox news minute. the mississippi man who was charged with sending poison letters to president obama, senator roger wicker and a mississippi judge has now been released from jail. through his attorney, paul kevin curtis denied involvement in sending those letters.

this comes as major evidence the fbi found no evidence of that poison ricin inside curtis's house. a big deal there. psa is delaying plans to let passengers to carry small knives and sports equipment on airplanes. the policy change was supposed to start on thursday but was opposed by flight attendants and air marshals and 9/11 family members. tsa will review the issue. senator max baucus won't seek re-election in 2014. the 72-year-old baucus is chairman of the senate finance committee. he served six terms, 36 years in that body. democrats will be defending six open seats in senate races in the next election. those are the headlines. now back to tracy. tracy: wow, heather nauert, thank you very much. a lifetime politician. >> 36 years. tracy: holy. seven u.s. financial services including pnc capital, one and discover,

scaling back top bonuses for executives that beat performance targets. well the reason? the federal reserve asked them to. this was reported in regulatory filings and first reported by our partners at "wall street journal" what does it mean for you the shareholder? let's bring in financial fund manager, anton schutz, chief investment officer of menden capital advisors. anton, i had understand they don't want to encourage risk-taking why regulators suggested this. but as a shareholder i want to take some risks to make some money. >> i don't disagree with you. there is real tradeoff here. comp is one of the most difficult issues whether at the executive level or the producer level. if you encourage people to take too much risk, you create danger. obviously guys at the top should be encouraged to manage the entire shift. there is fine line between taking risks and creating returns. i don't like regulators putting lots of rules on lots of things like this. i think it is important for the market to regulate these kinds of things.

and if a company is out of hand, the stock should have a low valuation. tracy: right. >> when you look at these companies, these aren't companies that created the crisis. tracy: right. >> none of these companies was terribly at risk said they would limit pay. there is all sorts of bills right now in europe, limiting comp of bank ceos and asset managers. as an asset manager i'm firmly opposed to the idea. i'm supposed to create return for my investors. tracy: that is your job. talk about how the banks did this earnings season, jpmorgan, morgan stanley, wells fargo all missing on top-line growth so they're still struggling, right? we're still showing signs of slowing loan growth. >> well, you know, there is loan growth. i think one of the problems is, again if we're talking about regulation, look at the rule change at the end of last year with capital gains. so what happens? a lot of activity happened in the fourth quarter. a lot of businesses got sold. tracy: yeah. >> so a lot of loan growth got pulled back into the fourth quarter out of the first quarter. there is loan growth if you look at the most recent

regulatory filings. the u.s. is not a robust environment right now. so what are the banks doing? they're giving us back capital. $41 billion in increased buybackses and dividends out big banks. that is the name. game. if there is no growth they will give it back to us. tracy: that is story for larger banks. but on small size it is really the story of consolidation, isn't it? >> it is. that it is tough. you have a flat yield curve. not a lot of loan growth. you have regulatory issues making very expensive for small banks to function. you have bigger banks, just a little bit above, seeing the same issues but they can buy their neighbor and get a better yield on the neighbor's portfolio than they can originate on their own. makes sense for both parties to get together in this environment. tracy: tough sell for a bank to make a 30-year loan at these low rates. they will not make money off me if i lock them in at 3%? >> that is why the majority of the mortgage loans are sold back to fannie and freddie and created as securities and dumped.

banks can't manage that. you do not get a 30-year deposit. tracy: sure. >> better for them to sell them. absolutely right. the margins are not there to create robust margins. tracy: quickly talk about what you like and don't like. you run a long short fund. what do you like now? >> i like guys that return a lot of capital, trade in low dividends. increase the buybacks. i like regions. regions is a big position for me, rf. they reported earnings today. they beat. phe numbers are a little low as far as the treat street has for them. they have earnings headwinds and buybacks. that is straight return of capital story. on smaller banks --. tracy: you like citi as well. what on the other side what don't you like? what are you staying away from? >> i won't give individual names because the companies will never meet with me again if i embarass them on the air. people piled into companies that benefited from rates rising dramatically.

as you can see rates have done a full circle. long bond is back where it was. short rates are not going anywhere for any reasonable period of time. banks would love short rates to rise of but noll happening anytime soon. those are the kind of companies who have bad balance sheets will benefit when rates rise but obviously getting hurt with rates being low. tracy: that is a fair amount of them. anton schutz, thanks for taking the time. >> my pleasure. ashley: all right. well, president obama's budget plan will lead to tax increases for many, not just high income earnings. the tax policy center found that the president's budget will raise about $1.1 trillion over the next 10 years through a series of limits on tax breaks, a tax on the banking industry and new estate taxes. now the tpc estimates that 86% of additional taxes in 2015 will be paid by those earning over $200,000. the president's budget proposal plans on also raising the tax on cigarettes. 94 cents more per pack. the tpc says that the higher

cigarette tax will affect low and moderate income families as they are more likely to smoke than higher income earners. there you go. i don't smoke but a pack of cigarettes, my gosh. tracy: a lot of money. ashley: a lot of money. tracy: a sneaky way to get more money out of you because they push you to higher brackets quicker. ashley: yeah. tracy: sneaky. a new on line sales tax expected to clear the senate. could it face a tough battle in the house? we'll have details on that next. ashley: a bogus tweet claiming president obama injured in a white house, explosion sending stocks plunging. we have the latest from washington to wall street. first let's take a look at latest winners and losers as we head to break. @

menaced the close, let's go to the floor of the stock exchange, stocks recovered this last hour after the flash crash, never actually call bidder earlier. >> you see the dow invaded 107 points. it dipped into negative territory, it was up 130 points and moved into negative territory. only to see it recover and get back to where it started. the dow still maintained a up arrows, up 3/4% and many of those that multi-year highs and annual highs and the fear index, mirror image moved to the up side and you see the vix moved dramatically higher during that time. keep a close eye on the home builders, same day we got the

new home sales, barkley's upgraded the home building sector and home prices will overshoot equilibrium levels and they think new-home prices are up 10%, 8% in 2013-14 and all up arrows. liz: see you soon. ashley: more on the flash crash. beyond the obvious question of internet security what was the reaction to market jitters. it went down quickly became back quickly. charles: we all thought about the flash crash in may of 2010 but i want to read you guys something about a flash crash. despite the rumbling of an alpine icepack has been heard put, the glacial height of the stock boom began to melt in the fall of sell--ff, sell-offs welo to avalanche. memories of the great crash and esdepression that followed have haunted america's subconscious. after all these years the nightmare will not happen again. 1962 there was a flash crash,

1962. that was from life magazine. tracy: things of gone down. charles: markets down, we certainly lost a bit if you will. the point is that crash was more or less selling, the idea was what did it mean? it wasn't a re-enactment of 1929 even though they're point it was in our subconscious and there's not a re-enactment of anything like that now despite the fact that even though we bounced back, the wind is out of the sales, the momentum we had will be interesting to see how the last hour of trading does because that is usually the hour when they get the momentum. no doubt it has shaken a few people but we had this conversation before about individual investors confidence in the system, the game is rigged and all these things but this has not helped and here i am telling people -- the national nightmare is not happening again even though this

is not fun stuff. ashley: all right, thank you very much, some perspective. the associated press taking action, resulting in the bogus tweet, senior washington correspondent peter barnes has that part of the story. peter: this bogus tweet said there were two explosions at the white house and the president had been injured. it was totally false but the white house, of the associated press reported that the white house brought this up at the beginning of today's white house briefing with jay carney. take a listen. >> it appears as though a twitter count has been hacked so anything will be paid for and shortly to clarify that. >> i appreciate that and i can say the president is fine, just

with him. >> the president finished a teacher of blood year event and looked just fine. the ap confirmed twitter account had been suspended following the hack and was working to correct the issue, securities and exchange commission declined to comment on this but i could tell you from the stories whenever there's a significant move like that in the market the market surveillance people always take a look at it and when we get anything concrete we get back to you. ashley: peter barnes, thank you so much. tracy: the senate expected to pass a bill that would allow states to collect sales tax from online retailers. the bill hurts consumers and small are online businesses but the next guest disagrees, dan crippen, executive director of the national governors' association, high time we start treating the internet as an interval part of the economy and we have the interval parts of

the economy. >> this is long overdue. supreme court decision was 1992 and had as its basis catalog mail-order sales. we have come a long way in 25 years. the internet is only a piece of that. very easy to calculate what ever these taxes are and easily transmitted to single points in the state. beckoning back as you were in market reaction to the 60s, this is going back to the 90s and it is not nearly what they say it is. tracy: is the marketplace fairness act. you say is easy to calculate the tax how? based on where i live? i will pay my own state tax? >> where you live exactly right. very similar to when you by the internet now and put in your zip code and give you back within a millisecond's several freight options down to the penny. no word difficult. tracy: 45 states have sales tax.

low way to say so is a lot of governors are on board including mine in new jersey. a lot of companies are on board, amazon, gap, targets, these companies to law online business. what is the conn case? what is ebay's gripe about this? >> ebay is trying to protect the business model as i would defy were ebay as well but i think they have overstated the effect of this tax, they have certainly not told the whole story about what the current law looks like. when you ask about the con there are a few states, a few senators opposing the bill in the senate. all of them from states that have no sales tax. essentially 45 states are subsidizing the few that have a sales tax. their businesses sell at any% or 10% discount to the rest of the country and that discount means those states have to pick out

the difference. state taxpayers and businesses the subsidizing those. tracy: no surprise governors like mine in new jersey and other states that are financially struggling if i can say that our for this because this is a big boon to the states. >> it is but it is also a boon to federalism. if we look at it that way and a big boon to the brand and mortar stores, those small stores you see in new jersey are competing against bigger stores and stores and every other state. it is a matter of playing simple fairness. tracy: there is an exception. if you make $1 million or less you are not subject to this. >> current bill defines a small business as under $1 million. senator durbin was on the senate floor while back saying that exempts 99% of people who sell on the internet. this can't be the burden that the opponents are making it out to be. the bill requires states provide for internet sellers the software, software services to

do all the calculations. tracy: does this go through? >> yes. tracy: i am with you. thank you. >> i believe you. i have ten seconds. tracy: come back any time. they say a lot of people won't shop online now. if i can still purchase stuff in my fuzzy slippers i will pay the tax. ashley: you gave him ten second that he took one. netflix shares surging 23%, head turning subscriber numbers putting it in the same league as hbo. details next. tracy: check your 10 and 30 year treasuries. wild ride now on changed. we will be right back. of virtuay all your imptant legal matters in just minutes. protect youramily... and launch your dreams. at legalzoom.com we put the law on your side. why are 8 million people sleeping better tonight?

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lori: i am lori rothman with your fox business brief. transportation safety board two day hearing on the 787 battery problems under way, looking into whether there is too much authority to aircraftmakers, making the dreamliner since those planes were granted. a lawsuit by jon corzine over the collapse of m f global, being sued by louis free. the loss of alleges he engage in risky trading strategies he and other top execs were responsible

for the demise. just in time for cinco they oh, adding fresh homemade margaritas to the menu. the mexican fast-food chain selling margaritas since the beginning but they using a mix and we knew all along. that is the latest on the fox business network giving you the power to prosper. >> this business brief brought to by my next.

ashley: netflix is back and feeling cocky these days saying now it is as big as hbo. dennis kneale to look behind the day. dennis: nothing better than a great come that? netflix shares popping up 25% on skimpy earnings and good subscriber growth? netflix sure does violets of an hbo one of the spending $100 million to create and produce the original shows. its first effort house of games posted all 13 episodes in

february, generated a lot of buzz and the critical range and the first quarter the company at a two million new subscribers in the u.s. bringing it to almost twenty million paying customers on par with hbo but let's not get too cocky. netflix in the u.s. is nipping the heels of hbo but overseas hbo had ten times as many paid suggs as netflix and total reach is triple that of netflix or trauma world and netflix spends a fortune to run to the people's contents so its profits are far lower than hbo, hbo at $1.4 billion in profit. only fifty million bucks at netflix despite revenue of $3.6 billion close to hbo but hbo paid twice as much per month as netflix customers pay but netflix is growing and hbo is and so the key question is does netflix growl at the expense of hbo? so far the answer is no.

all subscribers to netflix are more likely also to get hbo. netflix has other challengess. those $5.7 billion to hollywood, that amounts to liability of $94 a share, up 200 and netflix must pay a $1.3 million of that in the next 12 months or less, and rather than a effie revenue the company's increasing-to do and that is worrisome but you don't see the stock price today. ashley: of 20%, thank you very much. tracy: time for stocks as we go back to the floor of the stock exchange. traders react quickly to the bogus report president obama was injured in an explosion in the last hour. more on that, we found 144 points in two minutes. what were you thinking down there? >> blind in the beginning and copley square went to the setback and started to realize what was going on we knew at

some point of this was a false report. client sat down in washington two blocks from the white house. i called in immediately and the did know what was going on. look out your window. this is what we are hearing. around 1:11 or 1:12 the first confirmation this was not a true headline we were seeing. the market took time to react to it but computers don't have friends in washington that can tell them there's nothing going on at the white house. you get the snowball effect, all the programs canceled, the sell programs start chasing after each other and next thing you know volume goes away and you have volatility in the market. that is why we need to continue to have human interaction in place, experience and knowledge when situations like this come up and siiuations like this come up a lot more than we expect. tracy: old school investigative reporting. i hope there was nothing going on. >> all my clients were well

protected. tracy: thank you. ashley: airline shares soaring despite flight delays tied to those have a budget cuts. michael. will tell us which stocks are poised for climbing higher next. tracy: let's look at winners and losers on the nasdaq as we head out to break. digital your big winner up 4.7% and the dow up 118 points. we will be right back.

ashley: the wall street journal

reporting j.c. penney is working with turnaround for alex partners. the firm helping them with cost savings citing sources, j.c. penney working with them for months now, looking at cost savings, cash flow management and turnaround everything is what they need to do. this according to our partners at the wall street journal. ashley: all of the eve of. senate commerce committee leaders addressing the obama administration's choice to furlough 15,000 air-traffic controllers saying it raises serious safety and operational issues my next guest says the faa's claims are a smokescreen and airlines travelling public have been needlessly targeted. joining us is michael boyd of belated group international. you follow the airlines, how are these controller furloughs impacting the industry? >> they keep going for several days they will impact the industry. think of it now as senator schumer says the bad blizzard

but the blizzard will end some war will impact earnings, will impact revenues. ashley: so you say there's no reason for these cuts and it is purely an exercise by the obama administration to put pressure ultimately to raise taxes. >> absolutely. i saw jay carney pulling out a jive about when you have cuts this debate is 4% of the current budget which is up and today they have after sequestration $1 billion more than they had 5 years ago and 8% fewer flights to handle. they can't justify this in any of their way. ashley: let's talk about the airlines themselves. historically the first quarter is pretty tough, slow travel season but u.s. airways reporting first quarter profits. have airlines finally found a formula that works? >> you bet. seasonality between first quarter and third quarter not as much as it used to be.

you want to look for strength in latin america, strength in asia and strong domestic system. what comes to the top is delta air lines which has increasing position in south america, strong u.s. connecting hubs and a hub in tokyo. that is the recipe for strong earning instability. ashley: we should mention american usairways merger is expected to be completed by this fall. what are your expectations for this newly merged carrier? >> nothing but positive. we have looked at it from several perspectives in terms of service level, effect on communities, overall will be a positive thing because it will be a stronger carrier, there will be more air service for a lot of communities because of this so overall i think you will see a strong carrier. the only downside is the one world alliance which is weak in asia but in the u.s. it could be positive. ashley: one thing to keep an eye on is alaska airlines, always seems to score well in customer

satisfaction, it is on time a lot of the time, runs itself very well. they continue to do well. >> they have a strong niche and understand the customer. they have been a merger partner for various airlines for 40 years. going back to the 70s. they have always stayed separate and will stay separate and they are a carrier that because of the root system they have and the focus they have strong financially. ashley: the carrier have surprising power right now with capacity issues and so they can price a little higher but at what point does it become destructive to demand? are they getting close to that point? >> they are not chasing demand anymore. used to be when gdp went up airlines would follow. right now are air-traffic will grow based upon airline decision to add or detract capacity. capacity is going to be down 2%. there will be 200 fewer jet airplanes in the sky by the end of the year so airlines make the

decision what traffic they want to they are not chasing demand. ashley: a good position to be in and so much comes down to fuel costs and they have done pretty well recently. we see a big hike in oil costs, what does that do to ticket prices and the airlines? >> regardless of oil going up or down, it will go up, cost of travel will go up but if it does spike airlines can pull down capacity pretty quickly too. the airline industry has never been in this position before run by solid people, no more squirrels running airlines and breaking into the industry. pretty good future. ashley: finally found the formula that works. squirrels. mike boyd, thanks for joining us. you can see the snow. thanks so much. tracy: from snow to sunshine, not so sunny anymore. florida governor rick scott considering a republican-led bill to overhaul the state's alimony system including barring

payments from lasting more than half the duration of a marriage and imposing benefit caps based on salary. the bill would also allow courts to adjust existing alimony deals. florida will become the second state in the nation to end lifelong alimony. massachusetts enacted a similar law in 2011. some say it is mean-spirited and anti women. supporters in 20 states are considering similar efforts. lifetime alimony. ashley: well -- tracy: there are cases where it is necessary, but -- ashley: the guy is moving to florida. big night for a city that means something to cheer for as the boston celtics playoff against the new york knicks and a fox business exclusive, liz claman speaking with the ceo and co owner of the celtics about how the team and the city of boston is doing. liz claman will take us through the last hour of trading, "countdown to the closing bell" is next. suddenly, she does something unexpected

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